Statistics for Economics: Its Benefits and Limitations

Economics is one of the crucial parts of our life. It is highly used by financial sector professionals. But economics without statistics is no more useful. Here in this blog, we are going to share with you statistics for economics. Different types of statistics are used in economics. This blog will help you to unveil those statistics for economics. But before we start, let’s have a look at what is the meaning of statistics for economics.

Statistics in Economics

Statistics are used to deal with the quantification of data. It used various figures to represent the qualitative information that is used with the collection of data. The statistics in economics involve the technique to deal with the collection of data, tabulation, classification, and presentation of data. Apart from that, it is also helpful for the reduction and condensation of data. The statistics in economics are quite helpful in data analysis and data interpretation. 

Plural Sense Statistics

The plural sense economics is widely used in economics. Generally, the statistics are the numerical statement, or it can be the quantitative data that relates to each other. Let’s have a look at how useful the plural sense statistics are:-

Numerical expressed

The plural statistics in economics deals with the numbers and the quantitative. With this, the qualitative means the quality attributes i.e., rich, tall, poor, handsome, etc. It should not have any attached significance to the statistical universe.

Reasonably accurate

Most of the time, the statistics used in economics are reasonably accurate. The economist should try to make sure that the statistics conclusion is reasonably accurate that depends on the purpose of the investigation, likewise its nature, size as well as the available resources. 

Can Involve estimation

The statistics are economics is the vast field. It means that there is a massive amount of data that requires lots of time and effort to perform the operations. But plural sense economics makes this task quite easier with the help of estimation. It can help us to calculate the data from a small number of groups based on the estimation rather than the huge amount of data. 

Systematic data collection

It also offers systematic data collection from various sources. In other words, it is accumulating the raw data without information about the origin. It is quite helpful in economics, where we need to collect the data from various economic sources.

Relative

The plural sense economics is also offering the feature that is used to compare the data from different sources. But you have to make sure that the data is similar because you can’t compare the data with different natures. 

Multiple factors

Economics statistics is also helpful when we want to know how many factors affect the economy. We know that there is not a single factor that affects statistics. With this feature, we can also get to know how one single factor can affect a large number of other factors.

Aggregation

The statistics in economics are also helpful with aggression and the average of the data. Economics is not based on single data. It depends on a large amount of data. The economist uses this feature to calculate the per capita income of the country. 

Singular Sense Statistics

The singular statistics term is quite useful in data collection, presentation, classification, and quantitative data analysis. It involves various stages of statistical study. Let’s have a look at the key features of statistics. 

Collection of data

It is quite useful in data collection from various sources. For accurate data collection, it is used for census and sampling techniques. It can collect massive amounts of data with a large number of sources. 

Data Organisation

Data usually collected in the raw form. It means that data collection techniques collect the raw data, which is not useful until the data organizes into the understandable form. The data organization method organizes the data into a valuable form. For data organization, we use the arrays of data and tally bars.

Data Presentation

Data presentation is a technique that is helpful to present the data. Therefore anyone can understand the data easily. It uses tables, graphs, and diagrams to present the data so that anyone can easily understand the data.

Analysis of data

The analysis of data is quite useful to find the percentage, average, and draw the inferences of the data. Analysis of data uses the correlation, regression coefficients from the toolbox for analysis of data. 

Interpretation of data

The data interpretation is useful to find out the magnitude of percentage, averages, and degree of relationship that is useful for different economic variables.

Benefits of Statistics in Economics

There are a lot of benefits of statistics in economics. We can’t think about economics without statistics. The statistics have taken economics to the next level. Here are the few benefits of economics:-

Quantitative expression

Statistics give more weight to the quantitative data. It also adds the reliability and concreteness to economics by quantitatively expressing data. If you understand the magnitude of statistical data, then it can be easy for us to solve the economic problem. 

Economics Theories Deduction

The statistics in economics is also useful for the deduction of the economics theories. It helps to establish the economic theoretical concepts and models by providing the evidence. 

Identification of patterns and forecasting economic events

It is also useful to identify the patterns in data. There are lots of statistical tools for economics that help you to do this task efficiently. Thus it helps to predict future trends. 

Policies formulation

The policy formulation is used to make the policies for the nation. Statistics helps a lot in creating an effective policy. There are lots of methods in statistics for economics that help you build the best policies. Most economists also use statistical tools for this job. 

Economic equilibrium

It is the point of operation that is used between the producers and the consumers. In this, both parties are satisfied with the market. It is quite easy to do economic equilibrium with statistics in economics. 

Statistical Limitations

There are also some limitations to the statistics for economics. Here are a few limitations.

Supports only quantitative data

This is one of the biggest limitations of statistics in economics is that it only deals with quantitative data. It is quite easy to perform operations on the economic data with quantitative entities. On the other hand, it is quite complex to perform the same operations on a qualitative dataset. 

The study of aggregates

This is another limitation of statistics that are based on the study of aggregates. It means that you cannot perform the statistics operation on a single entity.

Homogenous data

Statistics operation cannot be performed on the heterogeneous data. The data should be homogenous to perform the statistics operations. If you have a large amount of data set, then you have to find out the homogenous data to perform the statistics operations.

Specific usage

The statistics are used by a limited number of people. The statistics in economics is only useful for the economists only. It means that it has limited usage with a few numbers of people. 

Prone to misuse

Statisticians and economists often manipulate the statistics data to create false statements. It emerges from the fraud for economics among different parties. Especially in case of taxes, the accountants create and manipulate the company data and show the wrong stats to the tax departments. Therefore it makes the statistics unreliable for economics. 

Conclusion

Statistics in economics is becoming a crucial part of economics. Therefore the students who are pursuing economic study should have the proper knowledge of statistics and statistics tools. There are some of the tools that is useful for statistics in economics. If you want to be a great economist, you should try to have a strong grip on statistics. Start from the basics and then try to solve the most complex problems in statistics with economics. So what are you waiting to grab any statistics book and then start learning statistics? 

If you are still finding it difficult to learn statistics, you can use our statistics experts‘ help. Our experts will help you to clear the basics to advanced statistics concepts. 

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